National Australia Bank is buying 86 400, one of Australia’s leading digital only banks. The incumbent plans to combine the neobank with its own digital bank UBank.
NAB already owns an 18.3 per cent stake in the challenger bank. It is now proposing to buy the remaining shares for a cost of approximately $220 million – described as a “premium” on the recent series B raise.
86 400, named after the number of seconds in a day, launched in 2019 offering a slick banking app and easy sign-up. It added home loans a few months later, an innovative energy switching service in 2020, and has been among Australia’s Open Banking leaders.
The neobank now has over 85,000 customers, 320,000 accounts, and more than $270m in approved home loans.
Subject to regulator and shareholder approval, NAB will acquire 100 per cent of the shares in its 86 400 Holdings Ltd, the holding company of 86 400.
“We’ve just rounded out an incredible year, delivered by our phenomenal team of only 120 people, and we’re only just getting started,” said Robert Bell, CEO of 86 400. “This will significantly fast-track our growth, propelling our business, customer numbers and balance sheet to a position which would’ve otherwise taken five years.”
86 400 and UBank will continue to operate as separate businesses until the transaction is finalised. Then 86 400 customers and technology will be rolled into UBank’s, which already has 600,000 customers.
“Combining with 86 400 will bring together UBank’s established business and 86 400’s experience and technology platform to meet the changing needs of our customers,” said UBank CEO, Philippa Watson.
“We are looking forward to having the 86 400 team join us to deliver the next generation of simple, fast and mobile banking solutions.”